To elucidate the molecular basis underlying the function of G protein- coupled receptors, muscarinic acetylcholine receptors (m1-m5) were used as a model system. The molecular mechanism involved in ligand binding, receptor activation, G protein coupling, and receptor assembly were studied by using a variety of different mutagenesis techniques. Pharmacological studies with chimeric m2/m5 muscarinic receptors showed that the three-dimensional structure of muscarinic receptors (and most likely, other G protein-coupled receptors) resembles that of bacteriorhodopsin in that the seven transmembrane domains (TM I-VII) are arranged in a ring-like fashion such that TM I lies directly adjacent to TM VII. Mutational analysis of the m3 muscarinic receptor led to the identification of several conserved Thr and Tyr residues (location: TM III, V, VI, or VII) which are critically involved in ACh binding and agonist-induced receptor activation. Systematic mutational modification of the N-terminal domain of the third cytoplasmic loop of the m3 receptor showed that a single amino acid (Tyr254; rat m3 receptor sequence), which is found in many other G protein-coupled receptors, is essential for the efficient activation of G proteins mediating stimulation of phosphatidyl inositol hydrolysis. Experiments designed to study the functional roles of amino acids that are highly conserved among all G protein-coupled receptors showed that four conserved Pro residues (location: TM IV, V, VI, and VII) play key roles in receptor expression, ligand binding and receptor function. Coexpression studies with fragmented m2 and m3 receptors showed that muscarinic receptors behave in a fashion analogous to two-subunit receptors (one subunit containing TM I-V, and the other one, TM VI and VII). In addition, coexpression experiments with mutant M3 and chimeric adrenergic/muscarinic receptors showed that muscarinic receptors are able to interact with each other functionally at a molecular level. The studies described above, together with biophysical and molecular modeling studies, should eventually lead to a detailed structural model of the ligand-receptor-G protein complex which should provide a rational basis for the development of novel muscarinic drugs.